by Fredreka Schouten, USA TODAY

by Fredreka Schouten, USA TODAY

WASHINGTON - Two out-of-state groups that funneled millions of dollars into California's elections last year are paying a combined $1 million for not properly disclosing their donations, the state's top political watchdog announced Thursday.

The settlement against Americans for Responsible Leadership and the Center to Protect Patient Rights, a separate group with ties to the conservative funding network of billionaire brothers Charles and David Koch, is the largest in the California Fair Political Practices Commission's 40-year history.

"This case highlights the nationwide scourge of dark money non-profit networks hiding the identities of their contributors," the commission's chairwoman, Ann Ravel, said in a statement.

The commission described the groups "as part of the 'Koch Brothers Network' of dark money political non-profit corporations." The Kochs have denied any role in the California initiatives involved in Thursday's settlement.

The year-long investigation, undertaken by the commission and lawyers in California Attorney General Kamala Harris' office, drew national attention for the spotlight it put on the role of non-profit advocacy groups in elections.

It was triggered when Americans for Responsible Leadership, an Arizona-based non-profit group, donated $11 million to the Small Business Action Committee, an organization that opposed a tax-hike initiative from California Gov. Jerry Brown, a Democrat, and supported another measure making it harder for labor groups to collect union dues for political activity.

Americans for Responsible Leadership initially did not report where it got its money.

After a complaint from a liberal watchdog group, Ravel's agency went to court, forcing Americans for Responsible Leadership to reveal that its donation came from another Arizona non-profit group, the Center to Protect Patient Rights. The center, which has opposed President Obama's health care law, received nearly $115 million in the past year from Freedom Partners, a non-profit trade group supported by the Kochs, according to Freedom Partners' most recent tax filings with the IRS.

Malcolm Segal, the Center to Protect Patient Rights' attorney, said Thursday the center's failure to disclose its role was inadvertent. "There was never any intention to conceal information from the public," he said. "It was a mistake." He noted that the settlement was a fraction of the $33 million penalty the group faced.

Kirk Adams, the president of Americans for Responsible Leadership, said he feels "completely exonerated." California authorities found no criminal wrongdoing, and the settlement makes it clear "there was no intent to subvert any statute," he said.

Koch spokesman Rob Tappan said the company played no role in last year's California initiative. James Davis, a spokesman for Freedom Partners, said his group "never provided support to anyone or organizations" directly involved in the California propositions.

The Fair Political Practices Commission said the Center to Protect Patient Rights made separate, improperly disclosed contributions - totaling more than $4 million - to another group active in state politics last year, the California Future Fund.

Ravel said the commission is moving forward with plans to force top officials with that group and the Small Business Action Committee to pay a combined $15 million to the California Treasury.

The settlement announcement comes during Ravel's last week on the job. She will head to Washington next week to join the Federal Election Commission, which polices political activity at the federal level.